If you run a business in the United States that has any employees, it is vital that you take out a workers’ compensation insurance policy. Most states require businesses to take out the policy to protect their employees in case of accident, illness or injury in the workplace. Unfortunately, this kind of insurance can be expensive, however failure to carry it could lead to the ruin of your business. Here, injury attorney San Jose company Bohn Law explains why compensation insurance is important, and how you can reduce the chance of accidents occurring.
WHO NEEDS WORKERS’ COMPENSATION INSURANCE?
Not every business is required to take out a workers’ compensation insurance policy. Partnerships and sole proprietors, for example, do not need to take out a policy unless they have employees who aren’t owners. It is still possible to take out an insurance policy to cover yourself, if you choose to, but it isn’t mandatory.
In some states, it is possible to avoid taking out workers’ compensation insurance if you pay your workers on commission as opposed to a wage, and in other states, such as New Jersey and Texas, it is not a legal obligation to take out the policy at all. However, without a policy, you could be leaving your business susceptible to problems.
WHY DO YOU NEED COMPENSATION INSURANCE?
Modern compensation laws provide a variety of benefits to workers who are injured in the workplace. This can include things like lost wages, loss of consortium, and physical and emotional distress. The cost of lawsuits by themselves can be high, but add to that the cost of compensation, and you could find your business in ruin. If you have workers’ compensation insurance in place, your insurance company will foot the cost of the bill, as well as any other penalties imposed upon you by the state.
THE DIFFERENCE IN STATES
In most states, a business owner can simply purchase a workers’ compensation insurance policy from an insurance provider, and this will be enough to meet their legal obligations. However, in two US territories and five states (Puerto Rico, the US Virgin Islands, Wyoming, West Virginia, Washington, Ohio, and North Dakota), employers have to get coverage through state operated funds.
REDUCE THE NEED FOR WORKERS’ COMP
Workplace safety is a necessity to reduce the chances of needing to pay out for a workers’ comp claim. Some of the things you can do to reduce the chance of a claim include:
Make sure to discuss safety with your staff at every available opportunity. Talk about it to them in meetings, and on a daily basis.
Safety advice can easily be found with a quick Google search. You can see what other companies are doing, and see if they would be worth implementing in your company.
You can also examine the trends in workplace injuries. Find out where the most injuries are occurring, and then make steps to eliminate the issues.
Workers’ compensation insurance is a vital part of running a business, and whether you are legally entitled to take out a policy or not, it’s a good idea to have one in place.